City Focus – Adelaide
Business Chief ANZ takes a look at how the small, ex-industrial capital of Southern Australia is reinventing itself in the image of Pittsburgh, Austin, and Silicon Valley
Situated on the coast of Southern Australia, Adelaide has a population of 1.27mn, making it the 5th most-populous city in the country. In the 20th century, the city became a hub for Australian manufacturing, with international car makers General Motors Holden, Chrysler and Mitsubishi calling the city home.
Due to the 2009 recession, industrial production in Adelaide slowed, with the closures of multiple auto plants, including the Tonsley Mitsubishi plant, which shut down in 2008. In 2016, state Premier, Jay Weatherill warned that Southern Australia was in danger of becoming a “rust belt,” in the vein of Detroit, Michigan, and Pittsburgh, Pennsylvania.
Now, however, Adelaide’s fortunes are changing. Rescue packages orchestrated by the Australian government, combined with the city’s rich winegrowing, culinary and cultural traditions have attracted outside investment and prompted early-stage innovators to migrate to the city. Weatherill said in 2016 that Adelaide’s future would depend on its ability “to use the artistic industries, the creative industries to also morph into their advanced manufacturing sector.” In 2018, the city appears to be well on its way to doing just that.
Damian Cave for the New York Times observes: “This working-class city is doing everything it can to recast itself as an innovation hub for South Australia and the world.” Looking to imitate the transformations undergone by cities in the US like Pittsburgh and Chattanooga, Adelaide, “like so many rust belt cities worldwide… is trying to recover from a manufacturing decline by hunting for innovation buzz — that glow of techno-progress that can propel a place from downbeat to in demand.”
After shutting down 10 years ago, the Tonsley Mitsubishi auto factory is once again generating value for the region, now as an innovation hub “with high-speed broadband, Ping-Pong tables and room for hip start-up companies.”
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The 61 hectare site is being reborn as a “major employment and education hub interspersed with community spaces and contemporary living options,” according to WSP news. The facility, which won the highest award for a large-scale development at the 2017 Australian Urban Design Awards, is part of the South Australian government’s plan to rejuvenate and modernise the city. Cave notes that “clustering universities, start-ups and government support is, after all, the Silicon Valley model.”
Global engineering and technology firm Siemens established a US$5mn maintenance and repair facility in Tonsley in 2015. Since then, other industry leaders have set up shop on site, including defence and private contractor SAGE Automation, and device manufacturer Micro-X.
Adelaide’s size, cost of living, and receptiveness to new enterprises is also drawing small-to-medium-sized startups to the city. The Upsider caught up with James Stewart, founder and CEO of two Adelaide-based startups, Coinstart and Kick.it, an online cryptocurrency educational tool and an anti-smoking health app, respectively.
Of the city, Stewart told The Upsider, “Adelaide’s small ecosystem works to my advantage. People in the scene are really supportive and it’s a cheap place to live. While it’s still a conservative city, things are changing – particularly with government doing bigger things, like the Tonsley Innovation Centre.”
Voxon Photonics is also based in Adelaide. Currently, the seven-person tech startup makes the most advanced 3-dimensional volumetric displays - holograms - in the world. Last month, the company created the first 5G volumetric video conferencing system - in other words, a holographic phone call - in conjunction with US telecommunications company Verizon in New York.
Voxon CEO, Will Tamblyn, is an alum of Adelaide’s Flinders University, the educational body married to the Tonsley Innovation District. Of his startup’s latest innovation he said: “Our goal is to show what’s really possible with this new generation of wireless technology. It’s not just for mobile phones but has applications in everything from remote medical diagnosis to video games and video conferencing.”
Adelaide is also serving as a testing ground for foreign startups. UK autonomous vehicle manufacturer Aurrigo - part of the RDM Group - is currently using the Tonsley Innovation District to focus test its new Pod Zero autonomous vehicles.
According to Business Cloud, “The Pod Zero has an operating speed of up to 24km/h, multiple battery options up to eight hours or 80 kilometers and, if not carrying cargo, can be fitted out to seat four people.”
Tonsley’s precinct director, Philipp Dautel, spoke with Brand SA News in October 2017. “Google offices around the world are known for the way they have reimagined traditional workplaces,” he said. “We’re taking that concept one step further by completely rethinking urban redevelopments and integrating work, life and play to create a district that is productive, convenient and enjoyable.”
Dautel continues: “I often compare [Southern Australia] to a start-up business because we’re small and humble… If you want to get stuff done as an entrepreneur, [Adelaide] is definitely the right place to do it.”